32 Transactions. — Miscellaneous, 



these commodities better than he can, he will grow wheat or something else 

 for which they have a demand, in the hope of trading with them. His 

 X^rodiice will then depend for its direction on their demand. All other 

 capitalists are influenced by the same motives. They know that their 

 stock, however ample, will not last long ; they therefore labour to replace 

 it ; if they can, they get others to help them, and, as an inducement, let 

 these others share then- present stock. All trade is founded on this simple 

 princixile. 



Mill, like Kicardo before him, has got confused by giving to the word 

 capital, which means the ownership of wealth, the definition which should 

 be given only to wealth. He uses the word sometimes in the usual — some- 

 times in the defined sense. 



The velvet-maker has a capital which he employs in making velvet ; 

 here " capital " means wealth. He gives his wealth to the weavers who 

 help him to make the velvet, and thus to renew his stock of wealth. Again, 

 the velvet-buyer has a capital which he devotes to buying the velvet. Here 

 " capital" means not wealth, but the ownership of wealth ; a right to a share 

 of the wealth produced in the world, which share is taken in the form of 

 velvet. The velvet-maker does not want velvet for himself ; like the farmer, 

 he produces things he does not want, so as, by trade, to get the things he 

 does want. His own demand for commodities has made him work, and 

 his neighbours' demand for velvet has given the direction to his work. 



There has been only one portion of wealth employed hi making the 

 velvet, that of the velvet-maker. The wealth of the velvet-buyer has been 

 employed about something else. He also has been making something he 

 did not want, so that he could get what he did v^^aut, which was velvet. 

 Mill's arguments are founded on the erroneous supposition that there were 

 two portions of wealth employed about it. 



If the velvet-buyer put his money into the bank, as supposed in my 

 illustration, it would have been unnecessary for the velvet-maker to have 

 any capital at all ; he could have borrowed it from the bank, and thus the 

 velvet-buyer would have supplied almost directly the commodities which 

 maintained the velvet-weavers while they were at work. 



It will thus appear that Mill's fourth theorem is erroneous, and the 

 corollaries he draws from it equally so. If a capitahst spends his wealth 

 in employing retainers of any kind, he does no more good to the working 

 classes than if he spent it by exchanging it for velvet or diamonds. 



His own demand for commodities is the only cause that his own stock 

 of wealth is employed in feeding and clothing labourers while they are 

 engaged in producing new wealth. If he does not himself produce the 

 very commodities he wants, it is merely because it is more convenient to 



